PRICE 20 18 16 14 12 10 8 6 4 2 Figure 10-3 Social Value 2 4 Supply Demand, 68 10 12 14 16 18 20 QUANTITY Refer to Figure 10-3. If the government wanted to tax or subsidize this good to achieve the socially optimal level of output, it would a. introduce a subsidy of $4 per unit. b. impose a tax of $4 per unit. c. impose a tax of $2 per unit. O d. introduce a subsidy of $2 per unit.
PRICE 20 18 16 14 12 10 8 6 4 2 Figure 10-3 Social Value 2 4 Supply Demand, 68 10 12 14 16 18 20 QUANTITY Refer to Figure 10-3. If the government wanted to tax or subsidize this good to achieve the socially optimal level of output, it would a. introduce a subsidy of $4 per unit. b. impose a tax of $4 per unit. c. impose a tax of $2 per unit. O d. introduce a subsidy of $2 per unit.
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section: Chapter Questions
Problem 5QCMC
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